Premier Minister Benjamin Netanyahu says that the decision was made "against the backdrop of the war and the new front in Syria".
The ambition is reportedly to double the Israeli population in the area.
"Strengthening Golan is strengthening the state of Israel, and it is particularly important at this time. We will continue to hold on to it, make it flourish and settle in it", says Netanyahu in a statement according to Israeli media.
A large part of the Golan Heights was occupied by Israel in connection with the Six-Day War in 1967 and the buffer zone was created under UN mandate in 1974. Israeli forces have also taken control of areas outside the buffer zone, including the region's highest mountain, Hermon, writes AFP.
Broke the agreement, according to the UN
In early December, Israel's military took control of the demilitarized buffer zone, which the UN, among others, has called a breach of the ceasefire agreement signed in 1974.
Israel has also carried out hundreds of attacks on Syria since the offensive that overthrew dictator Bashar al-Assad began in early December. According to Israeli claims, this has destroyed most of the capabilities that the former Syrian army had at its disposal.
The regime that has taken over in Syria, the Islamist group Hayat Tahrir al-Shams (HTS), said on Saturday that Israel's breach of the buffer zone poses a risk of escalation in the region, but that it is not interested in getting into a conflict with its neighboring country.
"The general exhaustion, after years of war and conflicts in Syria, makes it not suitable to get into new conflicts", said HTS leader Ahmed al-Sharaa according to AFP.
Spoke with Trump
In a statement on Sunday evening, following a conversation with US President-elect Donald Trump, which Netanyahu describes as "very friendly", the Prime Minister says that Israel is not interested in a conflict with Syria.
It was during Trump's first term that the US in 2019 became the only state to recognize Israel's sovereignty over the Golan Heights.
"The actions regarding Syria will be determined by what happens on the ground", Netanyahu announces after the conversation.
The Golan Heights, which are located on Israel's border with Syria, have a strategically important military location. During the Six-Day War in 1967, Israel took large parts of the area from Syria, and annexed an area of approximately 1,200 square kilometers in 1981.
Only the US has recognized Israel's sovereignty over the area, a decision made in 2019 by then-President Donald Trump.
Tens of thousands of Syrians and Palestinians fled or were expelled from the Golan Heights following Israel's conquest. However, around 23,000 Arabs, mostly Druze, still live in the area. Since Israel's conquest, approximately the same number of Israeli settlers have moved to the area. The settlements are illegal according to international law.